US stocks recovered from two days of losses after Federal Reserve Bank of Atlanta President Raphael Bostic said the central bank may be able to pause rate hikes this summer. Treasury yields remained high.
Traders abandoned their low-conviction moves in the middle of the trading day, propelling the S&P 500 higher. The Nasdaq 100 also rose as investors interpreted Bostic's comments as somewhat dovish. both indexes shrugged off the losses they suffered earlier after data signaled continued resilience in the labor market, supporting the case for the fed to keep raising rates.
Treasury yields across the curve remained above 4%. The policy-sensitive two-year rate has risen for three days in a row, the longest such streak in two weeks. A dollar index also held onto its gains.
While Bostic's comments boosted sentiment on Thursday, other central bank officials have reinforced their hawkish rhetoric in recent days. Bostic, like Susan Collins of the Boston Fed, has pledged to let the incoming economic data guide him. The focus is now on how much higher interest rates can rise in the United States and Europe, with swap markets pricing a peak fed policy rate of 5.5% in September, and some traders betting that the benchmark interest rate could rise to 6%.